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Associated Power Co. Ltd. Vs. Ram Taran Roy - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberSuit No. 1316 of 1964
Judge
Reported inAIR1970Cal75,73CWN701
ActsCalcutta City Civil Court Act, 1953 - Section 5; ;Transfer of Property Act; ;General Clauses Act - Section 3(36); ;Sale of Goods Act
AppellantAssociated Power Co. Ltd.
RespondentRam Taran Roy
Appellant AdvocateJohar Goho, Adv.
Respondent AdvocateR.L. Sinha and ;R.N. Das, Advs.
Cases ReferredRead v. Croydon Corporation
Excerpt:
- .....electricity is within the meaning of 'goods' used in clause 4(iv) of the first schedule of the city civil court act, 1953. in other words, the main contention is that it is the city civil court only which has jurisdiction to try this suit and not the original side of this high court. clause 4 (iv) of the first schedule of the city civil court act, inter alia, reads as follows:-- 'subject to entry 1 and entry 2, suits and proceedings exceeding five thousand rupees in value.- ***arising out of transactions of merchants and traders relating to the buying or the selling of goods or relating to the construction of mercantile documents.' 5. it may be recorded here that by a written agreement dated 30-7-57 the plaintiff agreed to supply and the defendant agreed to take electrical energy to.....
Judgment:

P.B. Mukharji, J.

1. In this Commercial Cause, the plaintiff Co. Associated Power Co. Ltd. is suing Ram Taran Roy, carrying on business under the name and style of Roy Dutta & Co. for the recovery of Rs. 7460.06 P as the price for the supply of electrical energy.

2. There were a number of points raised in the Written Statement but the issues have now been considerably narrowed, in the circumstances, I am just about to mention. Mr. Sinha, learned counsel for the defendant, raised only the following issue:

'Has this Court jurisdiction to try this suit on the ground that this is a suit not for goods supplied but for electricity consumed?'

3. Mr. Sinha, appearing for the defendant, abandoned all other contentionsraised in the Written Statement and subject to the above issue, he admitted allother facts pleaded in the plaint. It is alsoto be recorded that Mr. Sinha for thedefendant does not contest either thecontent or the amounts and figures pleaded in the plaint.

4. The only question for decision now in this suit is to determine the point whether electricity is within the meaning of 'goods' used in Clause 4(iv) of the First Schedule of the City Civil Court Act, 1953. In other words, the main contention is that it is the City Civil Court only which has jurisdiction to try this suit and not the Original Side of this High Court. Clause 4 (iv) of the First Schedule of the City Civil Court Act, inter alia, reads as follows:--

'Subject to entry 1 and entry 2, suits and proceedings exceeding five thousand rupees in value.- ***arising out of transactions of merchants and traders relating to the buying or the selling of goods or relating to the construction of mercantile documents.'

5. It may be recorded here that by a written agreement dated 30-7-57 the plaintiff agreed to supply and the defendant agreed to take electrical energy to be used by the defendant in the defendant's colliery at Kajoragram in the district of Burdwan. The overriding consideration in this agreement is that it is a purely commercial transaction for supply of electricity to a colliery.

6. Section 5(ii) of the City Civil Court Act provides that 'subject to the provisions of Sub-sections (3), (4) and of Section 9, the City Civil Court shall have jurisdiction and the High Court shall not have jurisdiction to try suits and proceedings of a civil nature, not exceeding ten thousand rupees in value.'

7. It is contended by Mr. Sinha that as the claim is only for Rs. 7460.06 P. the proper Court with proper jurisdiction was the City Civil Court in this case. In answer, Mr. Goho, learned counsel for the plaintiff, relied on Clause 4(iv) of the First Schedule of the City Civil Court Act as quoted above to say that this Court has jurisdiction as it is a suit exceeding Rs. 5000/-. The legal debate has centered lastly round the meaning of the word 'goods' in Clause 4(iv) of the First Schedule of the City Civil Court Act. According to Mr. Goho, learned counsel for the plaintiff, electricity is 'goods' and according to Mr. Sinha, counsel for the defendant, it is not 'goods' within the meaning of that clause in the City Civil Court Act.

8. I shall now briefly examine the different arguments, advanced by Mr. Sinha, appearing for the defendant. His first argument naturally is that the word 'goods' in its ordinary and common connotation, cannot and should not include something like electricity which is not tangible and just only current or energy. If the distinction that this argument tries to make is, between matter and energy then perhaps the answer in ' modern science of physics will be that matter is energy and energy is matter and therefore electricity according to the modern notions of physics can very well come within the expression 'goods.'

9. Mr. Sinha, thereafter relied on the State list, being list 2 of the 7th Schedule of the Constitution of India, items. 53 and 54 where the following expressions occur:--

''53. -- Taxes on the consumption or sale of electricity.'

And

'54.-- Taxes on the sale or purchase of goods other than newspapers.'

From this Mr. Sinha tries to deduce the conclusion that the Constitution of India drew a distinction between 'electricity' and 'goods' and therefore provided separately for taxes on electricity and taxes on goods. But that inference cannot be drawn from the Constitution. Article 366(12) of the Constitution provides expressly that unless the context otherwise requires ''goods includes all materials, com- modities and articles.' The definition appears to be wide enough. Electricity, it is contended, comes within materials or commodities or articles. Even if it did not, the separate mention in items 53 and 54 of List 2 cannot by itself justify a conclusion that the Constitution of India intended to draw any distinction between electricity and goods. Even if it did, that was for allocating taxes and not for drawing a distinction between 'electricity' and 'goods'.

10. But Mr. Sinha is on a stronger wicket when he relies on Pollock and Mulia's Commentary on the Indian Sale of Goods Act, 3rd Edition, page 13 where the following pasage occurs:--

'It is doubtful whether the Act is applicable to such things as gas, water and electricity.'

In other words, the learned commentators on the Sale of Goods Act were expressing doubts how far gas, electricity and water could be called 'goods' under that Act. In support of this view Mr. Sinha relies on the observations of the Division Bench of this Court in Rash Behari Shaw v. Emperor : AIR1936Cal753 where the Court observed: 'In our opinion that view (view expressed by Sir Frederick Pollock and Sir Dinshaw Mulla as quoted above) is correct certainly as regards electricity'. The Privy Council in Babulal Choukhani v. King Emperor had occasion to consider this problem and Lord Wright at page 135 in that case observed that there could be theft of electricity and that the technical rules applicable to proving the theft of a chattel did not apply to the theft of electricity. Lord Wright observed at page 135 of that report:--

'That offence was clearly established, because the user of electric current without the intention of paying is beyond question a dishonest user. That is all that is required under Section 39 which creates a statutory theft sufficiently established against whoever dishonestly abstracts, consumes or uses the energy. The technical rules applicable to proving the theft of a chattel do not apply to proof of this special offence'.

The Privy Council did not go into the question of whether the view expressed by Pollock and Mulla saying that electricity could not be goods, was correct or not.

11. Section 2(7) of the Indian Sale of Goods Act provides:--

'Goods means every kind of moveable property other than actionable claims and money; and includes stock and shares, growing crops, grass; and things attached to or forming part of the land which are agreed to be severed before sale or under the Contract of Sale.'

Naturally Mr. Goho relies strongly on this definition of goods in Section 2(7) of the Sale of Goods Act to say that it is an all-inclusive and residuary definition and it says that goods means every kind of moveable property other than the two exceptions, namely, (1) actionable claims and (2) money. Mr. Goho contends that there can be no doubt that electrical energy is movable. He therefore contends that it comes within the residuary definition and it must be held to be goods within the meaning of Section 2(7) of the Sale of Goods Act and the doubt expressed by Sir Frederick Pollock and Sir Din-shaw Mulla was more inspired by the English Act, where the definition was materially different, than by the actual definition under the Indian Sale of Goods Act. As at present advised I am inclined to accept this submission of Mr. Goho.

12. The point needs a little more analysis. We have seen that the City Civil Court Act does not define 'goods'. The Constitution and the Sale of Goods Act do. Both of them, as shown, are wide enough to include 'electricity' within the meaning of the expression 'goods'. The Transfer of Property Act does not define goods or the movable property. But section 3(36) of the General Clauses Act defines movable property to mean 'property of every description except im-moveable property.' That again is a kind of residuary definition within which 'electricity' can certainly come as movable property.

13. The Supreme Court in State of Madras v. M/s. Gannon Dunkerley and Co. (Madras) Ltd.. AIR 1958 SC 580, discussed at page 567 the question of sale and exchange of property for a price. It was not concerned in that decision with the point of meaning to be given to the word 'goods'.

14. The other decision of the Supreme Court is K. L. Johar & Co. v. Deputy Commercial Tax Officer, : AIR1965SC1082 . At p. 1089, the learned Judge observed as follows:--

'The matter came up again before this Court in Gannon Dunkerley's case and it was held that the expression 'sale of goods' was at the time when the Govt. of India Act was enacted, a term of well-recognised import in the general law relating to the sale of goods and in the legislative practice relating to the topic and must be interpreted in Entry 48 in List II of the Seventh Schedule as having the same meaning as in the Sale of Goods Act.'

The importance of this observation is that the sale of goods should not be given a too artificial and technical interpretation.

15. The case of Hemendra Lal Roy v. Indo-Swiss Tdg. Co. Ltd., : AIR1955Pat375 does not help Mr. Sinha because there it was pointed out at p. 378 that the electrical undertaking consisting of power house, other structures and plants and machinery were really fixtures and could not be called 'goods.' That question does not arise here.

16. There are provisions in the Electricity Act relating to theft of electricity or price for electricity but they do not conclude this point.

17. The best case, which supports Mr. Sinha's contention, is County of Durham Electrical Power Distribution Co. v. Commissioner of Inland Revenue, (1909) 1 KB 737, where Channell J. at p. 741 observed as follows:--

'Here I think it might have been argued, though I do not pretend to know enough about the scientific aspects of the case to speak with any certainty, that this supply of electrical current was rather the doing of work than the supply of goods, but, be that as it may, the case has been argued upon the footing that it is a supply of goods.'

18. The only defect of this authority is that there was no decision on the point whether electricity was 'goods' and that it was assumed in that case that supply of electricity was regarded as supply of goods. The hesitant observation of Channell J., therefore, was obiter dictum and even then was not very strong. That case went up in Appeal and reported in (1909) 2 KB 604. But there again there was no decision on this point. As Cozens-Hardy M. R. observed at p. 608:--

'This case has been argued on the assumption that electrical energy is to be considered as goods, wares or merchandise for the purposes of this clause, and we are dealing with it on that footi(sic) but it must not be taken that we have either assented to or dissented from the proposition which may some day require careful consideration.'

19. Except judicial doubts, expressed in a very hesitant manner in some of the cases just noticed above, there appears to be no authority in support of the proposition that electricity cannot be Roods. On the other hand, there are judicial decisions in India which say that electricity is goods. The first decision to notice is Naini Tal Hotel v. Naini Tal Municipality. : AIR1946All502 . The Division Bench of the Allahabad High Court at p. 505 observed as follows in that case:--

'The remaining objection that electric energy is not 'goods' within the meaning of Article 52 requires more consideration. It may be noted first of all that in the Allahabad case, cited in AIR 1938 Lah 338, no such objection appears to have been taken and it was assumed that the article applied to electric energy as much as to any other commodity. The word 'goods' is not defined in the Limitation Act, but according to the definition in the Indian Sale of Goods Act, the word means every kind of movable property other than actionable claims and money. Electric energy is bought and sold like any other commodity and there can therefore be no doubt that it is 'property'. Is it movable? There does not appear to have been authoritative pronouncement on this point, though doubt has been expressed as to the extent to which gas and electricity are 'goods' for the purpose of the English Sale of Goods Act.'

It was distinctly held in the above case by the Division Bench of the Allahabad High Court that electrical energy was movable property and goods within the meaning of the Limitation Act.

20. It will be unnecessary to refer to the Lahore case in Firm Attar Singh Sant Singh v. Municipal Committee Amritsar, AIR 1938 Lah 338 at p. 339 already mentioned in the Allahabad decision. I shall only make a short reference to a more recent decision in Municipal Committee, Harda v. Harda Electric Supply Co. (Pvt.) Ltd. Harda, : AIR1964MP101 . There is elaborate and learned discussion on this point at p. 106-7 of that report. The conclusion there arrived at was that electricity came within the meaning of the expression 'goods' and 'movable property'. From the common-sense point of view also it seems to me to be the plain meaning.

21. There is also a more cogent consi-deration in this regard. The question is the principle of construction when a statute creates new jurisdiction and affects the old and existing ones. The point for construction in this suit is the meaning of the word 'goods' in clause 4(iv) of the First Schedule of the City Civil Court Act. The plain question is, was it intended that the goods in that context was meant to be understood in a technical sense? Reading the scheme of jurisdiction as distributed between the City Civil Court and the High Court, and keeping in view the object of the City Civil Court Act as stated in the preamble to relieve pressure on the Original Side of this Court, it appears to me that although there is an overall outside financial limit of Rs. 10,000 for the City Civil Court, that limit is reduced to Rs. 5,000 in cases dealing with import or export of merchandise, stock of exchange transactions or future markets, documents of title to the goods under the Sale of Goods Act, transactions of merchants and traders relating to the buying or the selling of goods or relating to the construction of mercantile documents or relating or arising out of transactions of mercantile agents under the Indian Sale of Goods Act. The principle appears to be reduced value for Citv Civil Court Jurisdiction where the transaction concerned is of commercial nature because all these items mentioned in clause 4 of the First Schedule of the City Civil Court Act show that they are more or less of commercial nature. Therefore it was provided that the Original Side of this Court shall continue to have jurisdiction and the limit was that it must be over Rs. 5,000 and not below and if below then it would go to City Civil Court. This interpretation is more consistent with the language of the Act and the intention expressed there. For any other view would lead to this absurd result which I can foresee that a commercial suit for sale of batteries claiming, say, a sum of Rs. 6,000 could be filed in the High Court, but the same suit for the same amount of money for supply of electrical current which would be producec by joining the terminals of these batter ies, would not lie here in the Original Side of this Court. That would be the plain result of accepting Mr. Sinha's submission. Mr. Goho criticised this by saying, and I shall quote his words, that battery is goods but when you join the terminal producing electricity, it is no longer goods?

22. When jurisdiction of a Court relates to such general expressions 'transactions of merchants and traders', 'buying and selling of goods', as in Clause 4(iv) of the First Schedule of the City Civil Court Act, It is essential that no artificially technical and narrow interpretation should be adopted to cut down the broad connotation of such general expressions.

23. I am conscious of the language of the agreement for electric supply in this case and a copy of which has been annexed to the plaint. These are the standard forms. This agreement for supply of electrical energy does not use the traditional words of buyer and seller. The words used are 'consumer' and not 'sale' but 'supply' and the payment is described as payment of energy bills under clause 13 of the agreement. But as I have said that for the purposes of construing the jurisdiction of this Court under clause 4(iv) of the First Schedule of the City Civil Court Act I am satisfied that the word 'goods' is used therein its broad, plain and ordinary connotation without the subtlety or artificiality that electricity is energy and not matter. The language, 'consumer' or 'supply' is the usual language for supply of electricity. That does not make it inconsistent with the sale of electricity. Even in economics the word 'consumed' or 'consumer' is used in respect of many goods irrespective of the fact whether they represent energy or not. A point was made by Mr. Sinha that this was not a sale of goody in the sense that the buyer or the consumer'got the goods for all purposes of sale, but were entitled to use the electrical energy supplied by the plaintiff at the particular colliery or at the defendant's precincts. That again is not in my view inconsistent with the sale of goods or with the sale of electricity as goods. Mr. Sinha also argued that by purchase of this electrical current the consumer did not become the absolute owner in the sense that he could not divert the goods or the electric current to somebody else. Even so that would still make it a sale of goods for there are many conditions of sale in these days for goods purchased which cannot be sold or sold under certain limitations. These considerations cannot decisively determine the effect and meaning of the word 'goods' in clause 4(iv) of the First Schedule of the City Civil Court Act for purposes of jurisdiction. But on this agreement for supply of electricity in this suit Mr. Sinha faces insuperable difficulties. This agreement is certainly a 'mercantile document' within the meaning of Clause 4(iv) of the First Schedule of the City Civil Court Act, for it is a document between merchants and traders, for supply of electricity at the business of Colliery of the defendant. All these questions which Mr. Sinha has raised on this agreement involve the construction, interpretation and meaning of words and clauses of the mercantile documents. Therefore this suit also comes within the jurisdiction of this High Court under the meaning of the expression, 'construction of mercantile documents' used in clause 4(iv) of the First Schedule of the City Civil Court Act.

24. In conclusion I will refer to two English authorities. In the Thirteenth Edition of Chalmers' Sale of Goods, 1893 at page 183 there is an observation on which Mr. Sinha has naturally relied and that observation is in these terms:--

'Gas, water, electricity may be the subjects of larceny, but it is doubtful to what extent they are 'goods' for the purposes of this Act.'

Now this comment does not advance Mr. Sinha's case any further. We have already noticed this view before. Except expressing doubt it does not go beyond to determine the point. We have noticed the English decisions also on this point. But what is necessary to notice is that the scheme of the definition of 'goods' in the English Sale of Goods Act as contained in Sections 5, 6 and 7 and section 62 of the English Sale of Goods Act is different. There under Section 62, for instance, goods include all chattels personal; excluding no doubt things in action and money, Here under Section 2(7) of the Indian Sale of Goods Act goods 'means every kind of moveable property other than actionable claims and money'. They are not therefore confined to personal chattels. The context and the expressions are entirely different in the English Act. It would therefore be wrong in my view to import English doubts as representing the law on the Indian statute. So far as I see that even in England nobody has yet said and decided that electricity is not goods. Reference was made to the decision in Read v. Croydon Corporation, (1938) 4 All ER 631 at page 647 where water appears to have been held to be goods and a similar argument that the contract there to supply water was a contract for services was repelled. The essence, however, of that decision was that it was decided on the basis of the relationship between a local authority supplying water and the rate-payer and not on the basis of a contract between parties to a contract for the sale of goods or for services. The claim there arose out of a statutory duty.

25. In the view that I have taken and for the reasons recorded above, I answer the issue in the affirmative and hold that this Court has jurisdiction to try this suit. I hold that electricity is goods within the meaning of clause 4(iv) of the First Schedule of the City Civil Court Act.

26. It follows therefore that there will be a decree for the amount claimed with interim interest and interest on judgment at 6 per cent per annum and costs.


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